Why Invest in Zambia? Damoni Kitabire African Development Bank - - PowerPoint PPT Presentation

African Development Bank Group

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Why Invest in Zambia?

Damoni Kitabire African Development Bank Resident Representative, Zambia UK-Zambia Trade and Investment Forum

Central London, November 4, 2015

TH THE AFRICAN DEVELOPMENT BANK – WHO WE ARE:

• Established in 1964
• 54 African Member Countries and 24 non-regional

members

• Concessional and non-concessional lending to

Governments

• Lending to private sector through commercial banks,

equity funds, guarantees and insurance

• Private Developmental Projects can be supported

directly

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TH THE AFRICAN DEVELOPMENT BANK – WHO ARE WE: (C

(Continued)

• Our Strategy focus for the continent is:

 Infrastructure Development;  Regional Integration;  Private Sector Development;  Governance & Accountability;  Skills & Technology

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ZAMBIA ECONOMIC TR TRENDS

• Growing Economy – in excess of 7% during

2001-2010

• Slowing in recent years 4.6% in 2015

(mining slowing and electricity supply deficit affecting production)

• Key sectors: Wholesale and Retail Trading

(18.5% of GDP), Construction (13.1%), Transport and Communication (10%), Mining (10%)

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ZAMBIA ECONOMIC TR TRENDS (C

(Contin inued) d)

• Commodities crunch, falling copper prices

(USD 10,000 to USD 5,300 per ton)

• Inflation stable around 6-8% during past

4 years, but recent depreciation of Kwacha by almost 50% to the US-Dollar adding pressure

• n prices.

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ZAMBIA ECONOMIC TR TRENDS (C

(Contin inued) d)

• Foreign Direct Investments growing – USD 2.1

billion (2013) – 66% in Mining, 21% in Manufacturing, 9% in Financial Services,

• Growing Trade – increasing non-copper exports

(cement, gemstones, agri-products, copper wire)

• Exports – USD 10.2 billion (2014)
• Imports – USD 8.6 billion (2014)
• Reserves 3.7 months of imports (target 4 months)

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CHALLENGES – CURRENT STATE OF PLAY

• Fiscal Deficit (6.9% of GDP, 2015) – large

investments in infrastructure (roads) partly to blame

• Infrastructure Deficit leading to higher costs and

stifling growth

• Electricity supply is in significant deficit

– hydro dependence on the Zambezi/Kafue Basin

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CHALLENGES – CURRENT STATE OF PLAY

(c (conti tinued)

• Roads – corridors are more or less in place

/ now need to link rural production with urban consumption

• Rail – under investment
• Water availability in some urban areas

(affecting industry)

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CHALLENGES – CURRENT STATE OF PLAY

(Co Contin inued)

• High Dependency on Copper – vulnerable to

commodity shocks

• Diversification and Transformation of the

economy urgently needed

• Low Productivity of skills – often a mismatch of

skills supplied and skills demanded /labor regulations

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OPPORTUNITIES – WHY IN INVEST IN IN ZAMBIA?

• Peace and Stability for more than 50 years
• Strategic Geographic Position with access to

neighboring countries

• Macro-stability and a growing consumer market

– domestically and regionally

• Some current macro economic issues
• Food demand is growing (agro-business),

construction materials (many are still imported), forestry products, alternative energy needs,

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OPPORTUNITIES – WHY IN INVEST IN IN ZAMBIA?

(Co (Continued)

• Robust Financial Sector offers opportunities

for further development, more competition needed.

• Opportunities in renewable energy and

hydro in the North-East of the country

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BANK PORTFOLIO – WHAT WE DO IN IN ZAMBIA

• Country Strategy (infrastructure and Private Sector )
• Invested more than USD 1.5 bill. Current portfolio

USD 890 mill.

• Continue to support Government in Infrastructure

Development (80% of what we do)

• Support Agriculture (value chains – Cassava and

Cashew),

• Skills and Entrepreneurship
• Private Sector (Lines of Credit to local banks)

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BANK PORTFOLIO – WHAT WE DO IN IN ZAMBIA

(Co (Contin inued)

• Possibility of providing Corporate Loans
• Large transitional projects – e.g. 2400 MW Batoka

Dam (lead arranger)

• Insurance Type Products:
• Partial Risk Guarantees (e.g. power purchasing

agreements)

• Partial Credit Guarantees

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Than ank You

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